The Ministry of Mines and Hydrocarbons, Equatorial Guinea has announced that it is continuing discussions with Russian Energy giant, Lukoil, on the development of offshore block EG-27.

The country was the host of the African Petroleum Producers’ Organisation Council of Ministers meeting that held on Monday, 15th June, 2020.

His Excellency, Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons, Equatorial Guinea commented on the situation saying: “We are still in talks with Lukoil. We recently had a video conference, where I discussed our opinion with them…we want to give them some time to make the decision. But the period is reaching its limit. By July, we must make a decision; or the agreement with Lukoil will continue, or we will recover that area and promote it again for any other interested party.”

He noted that the Russian firm had cut its oil production in compliance with the agreement of the OPEC+ deal that went into effect in May. This will impact the decision that will be made regarding the offshore block.

“They are still considering it and many factors have changed,” said H.E. Minister Lima. “I think the most logical thing to do is think about doing more replenishment evaluations. Maybe next year, if we have an agreement, it will be then when Lukoil makes the decision of the best concept.”

Block EG-27 (formerly Block R) is located in the Niger Basin and it was one of the nine blocks awarded after the completion of the EG Ronda 2019 Oil & Gas Licensing Round in Equatorial Guinea. Lukoil and GEPetrol (The national oil company of the country) were awarded the block. Lukoil is expected to notify the ministry of its stand on the development of the block by July.

PJSC Lukoil Company is the second-largest oil pl0company in Russia and it specialises in the extraction, production, transportation and sale of petroleum, natural gas and petroleum products. It is the largest non-state enterprise in the nation in terms of revenue and one of the largest producers of oil in the world.